President Trump’s signature on the One Big Beautiful Bill Act (OBBB) over the Independence Day weekend marked a milestone for school choice advocates. A key component of the sweeping legislation, the Educational Choice for Children Act (ECCA), introduces a federal tax credit for donations to Scholarship Granting Organizations (SGOs) that provide private school scholarships.

The ECCA offers individuals and corporations a dollar-for-dollar federal tax credit for contributions to SGOs, up to an annual nationwide cap of $5 billion. These organizations, in turn, distribute scholarships to families to help pay for K–12 private school tuition and related educational expenses.

Supporters describe the measure as a historic step toward expanding educational freedom, particularly for families seeking alternatives to public schools. The law’s design allows donors to contribute appreciated assets such as stock, providing tax advantages while funding scholarships for students across the country.

No Vermont SGOs, No Access—Yet

The ECCA relies on SGOs to connect donors and families. However, Vermont has no existing K–12 SGO infrastructure, and most SGOs operating in other states are bound by state-specific tax-credit programs that limit scholarships to in-state residents.

Even national organizations, such as the Children’s Scholarship Fund, operate only in partnership with local affiliates in select states. Without a Vermont affiliate or an independent SGO based in the state, families seeking to enroll their children in independent schools like Christ the King Elementary in Rutland have no pathway to access ECCA-funded scholarships.

More on Vermont’s tuition changes: Read here

State Politics Could Complicate Efforts

The absence of SGOs in Vermont is not the only barrier. The recently enacted H.454 law imposes strict limits on which independent schools may receive public tuition payments. To qualify for new tuition contracts, an independent school must be located in a district without a public school for certain grades and have enrolled at least 25% publicly funded students in the 2023–24 school year.

Additionally, H.454 prohibits public tuition payments to all out-of-state independent schools. These restrictions have significantly reduced access to tuitioning programs for families and have forced some smaller private schools to reconsider their financial models.

Any effort to establish a Vermont-based SGO could encounter political opposition. Lawmakers who supported H.454 framed it as a way to ensure accountability and prioritize funding for public schools, and they may view SGOs as undermining those goals.

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Opportunity That Requires Action

For Vermont families and private schools, the ECCA represents a potential funding stream that could help counterbalance the effects of H.454. However, without a Vermont SGO or a national organization willing to serve out-of-state recipients, the program’s benefits are currently out of reach in the state.

Creating a Vermont SGO or forming a partnership with an existing national organization would be essential steps to unlocking ECCA-funded scholarships for local families. Until then, the federal tax credit remains a theoretical opportunity for Vermont’s private and faith-based school communities.

What Would It Take to Set Up a Vermont SGO?

Establishing a Scholarship Granting Organization in Vermont would require several key steps. A group—potentially formed by private schools, churches, or parent coalitions—would need to organize as a nonprofit, apply for 501(c)(3) status, and meet federal ECCA criteria for scholarship administration. This includes creating operational policies, donor outreach strategies, and scholarship guidelines that align with federal requirements.

Currently, Vermont has no laws specifically authorizing or prohibiting K–12 SGOs. In theory, a Vermont-based 501(c)(3) could begin awarding private scholarships to help students attend independent schools without needing state approval, provided no public funds are involved. However, the absence of a clear legal framework leaves open the possibility that state lawmakers or agencies could impose new restrictions or regulations if they view such efforts as undermining public school priorities.

Advocates and interested groups may wish to engage with their legislators to seek clarification on Vermont’s stance or to explore whether supportive legislation could be introduced. Building an SGO would not only require nonprofit expertise but also careful navigation of Vermont’s current political and educational landscape.

The Road Ahead

The federal government will issue further guidance in the coming months to clarify qualifying criteria for SGOs and scholarship recipients. Meanwhile, private schools and family advocacy groups in Vermont face a choice: organize and build the infrastructure to take advantage of ECCA or watch other states benefit from a program designed to expand school choice nationwide.

Whether Vermont’s education landscape will allow such efforts to gain traction remains uncertain. For now, the promise of the One Big Beautiful Bill’s school choice provisions stops at the state’s borders.

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Dave Soulia | FYIVT

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